Managing Client Dreams

As a wealth manager, I have learned over the years that being a dream killer doesn’t work. Dream killers are those who deliver a wake-up call in a stark manner. The client’s aspirations …


As a wealth manager, I have learned over the years that being a dream killer doesn’t work. Dream killers are those who deliver a wake-up call in a stark manner. The client’s aspirations may be unrealistic or he/she is about to make an irrevocable decision (such as quitting a job) and needs some serious reality testing. The task of the advisor is not to nix the plan outright but to manage the client’s dreams and help the client adjust their expectations to fit their financial situation.

It is not as easy as you think. Some people are pretty wedded to their dreams, and it often takes a few meetings or even years to cull out what is possible and what is not.

When Beth came to see me in 2005 she was 63 and talking about retiring in two years. Divorced and living in a spacious, elegantly designed home, Beth was continuing the lifestyle she was used to when she was married. Although Beth was earning a six-figure income and consciously saving, her divorce had left her with far less investment income than she would need for retirement. I ran the retirement projections (including downsizing her home) and not surprisingly, she was set to run out of savings in seven short years if she didn’t work longer or alter the way she lived. We opted for the former. But it wasn’t easy.

Over the next five years Beth lost her job twice. Most women in their late 60s would have thrown in the towel, but Beth didn’t. Each time she found a new job. I was in the background supporting her and gently prodding her along. But Beth made the commitment to stick with the original plan. In the meantime, we talked a lot about her lifestyle. She not only came around to wanting less, she did this by spending less in the pre-retirement years, proving to herself that she could do it. When I met with Beth, who turned 70 this past summer, she looked at me and said, “You know Betsey, I am not sure I can do this much longer.” And for the first time, I was able to say to her, “You don’t have to; you can make this work.”

Sometimes I have to change strategies and back away from saying, “No.” Clients may not want to hear “You can’t” when they are looking at a balance sheet that says they can – at least for now. They need help in visualizing what that balance sheet is going to look like 10 years after purchasing their dream. So I try to slow down the decision making process to ensure that the client and I have done our homework. In the end, the client has to own the dream – take responsibility for not only the initial decision but the consequences as well. If it is just me telling them what they should do, chances are it won’t work.

The third time Fred and Sarah asked about buying a particular second home, I knew my previous push back had not been accepted. I was going to have to find a way to make this dream work. It was not about the upfront money – there was enough cash and access to loans to buy this house. But there were tradeoffs and choices down the road that could impact the affordability of their plans. Our dreams can make us poorer if we execute them without exploring all the implications.

So I switched from advising on whether this was a good purchase to understanding the issues involved. For instance, Sarah adamantly wants to retire in four years. By removing her income in 2016, the mortgaged second home may no longer be sustainable without giving up other expenditures. Fred and Sarah have been strong financial supporters of their children and love travelling. If they could only have two out of three dreams (second home, support for children or travelling), would they be willing to cut back on one in order to preserve the others and their retirement?

By creating a decision tree, we changed the final analysis from “Do we have enough money to do this now?” to “Can we afford to make this investment, given all of our long run goals?”

It is better for my clients to end their dreams than for me to do it. I don’t know whether Fred and Sarah will go ahead and buy the second home. I do know that they weren’t ready to pass up this dream the first two times I resisted. So I helped them become fully aware of the tradeoffs. Now, if they do proceed, they can create a plan that makes their dream both attainable and sustainable.

Betsey Purinton, CFP® is Managing Director and Chief Investment Officer at StrategicPoint Investment Advisors. You can e-mail her at